← Right About Now - Legendary Business Advice
Right About Now - Legendary Business Advice
Inflation, Taxes & Interest Rates: The New Reality for Business Owners
00:17:01
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- [00:00]
A
Most entrepreneurs are on a collision course with massive failure and the reason is directly hitting your cash flow, not your business plan. Tune in for an uncensored no BS reality check as the hardcore closer Ryan Stuman exposes the crippling facts that force you to be average and keep you stuck in the middle. Stop chasing comfort and start fighting for your financial freedom. This is the brutal truth you need to hear to survive the current economic climate.
- [00:27]
B
The truth hurts, but God designed the truth to hurt us because we're only motivated by two things, pain and pleasure. And the truth hurts to motivate you because of pain to go do what you need to do. And we just hide as citizens, as humans, we're hiding from the truth and we're trying to get pleasure out of everything. But pain is a bigger motivator than pleasure.
- [00:48]
C
This is Right about now with Ryan Alford, a Radcast Network production. We are the number one business show on the planet with over 1 million downloads a month. Taking the BS out of business for over 6 years in over 400 episodes. You ready to start snapping necks and cashing checks? Well, it starts right about now.
- [01:11]
A
All the best practices in the world are set up to get average. And so when you're actually chasing the top of the mountain or you're aspiring things, the world is conditioning us. If you want to have a bigger life, a better life, to have impact, to do things, you have to take risks, break free from average. It never felt like it had an agenda because it felt felt like it was free. You were freed up. I love giving gifts, but you know what? I don't love shopping. It seems impossible to find unique gifts these days. I got four boys that seem to have it all and a wife that I want to make happy. That's why I love Uncommon Goods. They have products that are unique from some small vendors. Handmade, handcrafted, made in the usa. I love these guys. Uncommon Goods makes holiday shopping stress free and joyful with thousands of one of a kind gifts you can't find anywhere else. Trust me, I know. Because I couldn't find anything. And Uncommon Goods comes to the rescue every time. Games, toys, clothes. One of a kind, unique things that you can't find anywhere else. I love these guys. Let me tell you, you want to go there, you want to shop USA based and Uncommon Goods has me and you covered. So shop early, have fun and cross some names off your list today. To get 15% off your next gift, go to UncommonGoods.com Ryan that's UncommonGoods.com Ryan for 15% off. Don't miss out on this limited time offer uncommon goods. We're all out of the ordinary. Okay. Hey, small business owners, let's talk about how Found can help you wrangle your finances once and for all. When was the last time you felt like you had your business finances totally under control? Every expense categorized, every receipt tracked, every invoice sent. Oh, and you were prepared for tax season. If the answer is never, you're not alone. And that's what Found is for. Found is reimagining what business banking should be by putting your bookkeeping, invoicing and tax tools directly into your business checking account. They've automated things like expense tracking, finding write offs and budgeting for tax time. You can even send invoices for free and pay your contractors. Everything, all from one app. Look, I struggle with this myself. I pay contractors left and right. Here, there, everywhere. Keeping up with all of it as a small business owner with multiple companies is next to impossible. That's what I love. Found. They help me with this. They'll help you. I basically replace three apps with just found and I don't miss the stress at all. And neither will you take back control of your business. Today, open a Found account for free@found.com. that's f o u n d com. Found is a financial technology company, not a bank. Banking services are provided by lead bank member FDIC was. Because if you want to chase past what everyone else has, you got to be willing to do what no one else is willing to do. That's a lot of the ways you've built your business. It looks like it.
- [04:55]
B
You know, the name of my company is great for the academy. For that reason.
- [04:59]
A
I didn't even know it. I love it. What does that stand for to you as human being?
- [05:02]
B
We're fighting this force of average. We are fighting mental limitations, we're fighting financial limitations. Freedom means you have the time and the means to do whatever you want whenever you want. Most people, they get into business because they want to be their own boss and then have time, freedom. But then what happens for most people is they have neither of those. They have to answer to investors, a board of directors, employee, middle management, and they have no time left over to do the things that they want to do with the money that they've made. Just trying to help people break free from all of that stuff.
- [05:35]
A
What do you make of the business climate right now in America?
- [05:39]
B
Administration and the government has got in the way of my success. When I was a drug dealer and I was trying to be successful as a drug dealer. The government got in the way of my success as I became a convicted felon. And Dodge Frank was passed in 2010. They wouldn't allow me to do financial stuff anymore because I was a felon. So they've intervened twice, but it hasn't stopped my success right now. Think about this. Just two years ago, you can make money off of Rolexes, Lamborghinis, private jet charters, crypto, nft, Mastermind, anything we touched. Real estate, houses and cars were selling for tens, if not hundreds of thousands of dollars over list price. Interest rates were dirt cheap. Gasoline was dirt cheap. Everything you touched you made money from. And our government got in there. When these people take it all away from them, there's no time in my life. I was a loan officer in 2007, 8, 9 and 10. Even though the mortgage market was crashing, there was still people that were making money and it was only the real est mortgage market that was crashing. I never seen the government take everything away. They have the last couple of years. What happens is we're chasing policy form. When Congress pass an act or a law or president puts an executive order in, it takes a few years for it to catch up. It doesn't happen immediately.
- [07:00]
A
This is a test of IQ of America right here where we're at.
- [07:04]
B
Common sense isn't so common anymore because we have parents that for two or three generations now have let their kids be raised by video games, iPads, computers. I was in school against grade A, he's got in trouble. And now there's all these grading curves, participation trophies for education and stuff like that. We're seeing the consequences of that. We're told the stove would burn your hand and you put your hand on it anyway. They laughed at you. They were like, you're an idiot. I told you the stove was hot. Now it's like, oh my God, we've got to get rid of stove. It's just a completely different climate. We're seeing the consequences of that.
- [07:38]
A
Accountability is the word and it's gone out the window because we have conditioned everything to be convenient and comfortable.
- [07:47]
B
Great.
- [07:47]
A
We want our kids to be comfortable. It's not that we don't want them to have a great life, but you don't learn or have a great life without lessons and consequences and accountability. You've nailed it. We're seeing the participation trophy. People are now running companies and government and other things. What's crime in California? You murder somebody, you're out of jail in 10 years.
- [08:08]
B
They don't even report it. In some of these cities, LA and New York, they don't even report it anymore. The FBI put a report out the other day saying crime's down by 4%. But that's because New York, Los Angeles, US, Houston, Texas, Chicago doesn't report crime to the FBI anymore. We're not getting real statistics, we're not getting a real education, we're not getting real accountability. And we wonder why we have fake ass people ruining our economy that are in power. It's crazy.
- [08:31]
A
I'm independent as well. I voted both sides of the line. I think my practicality and principles and morals probably lean right, but I'm not afraid to cross the aisle. I consider myself independent. What's the biggest thing that impacted you from a business with Today's client?
- [08:45]
B
Number one, interest rates were 3 and 4%. You could go buy a rental property and you could cash flow it. Now you have to buy that thing for cash or put a significantly larger down payment down to get it. Cash flow at six and a half to seven and a half percent. Then on top of that, in a lot of blue states they have cap the amount of rates that you can put on the rents. If you raise the rent every year, they've said, oh, you can only do 5%, you can do 10%. But they didn't cap the amount of tax increase because the property values went up. They didn't map the amount of interest. My properties in Florida, I've sold all them but one and I'll sell it is because I can't raise rent. But the insurance company raised my policy 300%. The government had the landlord. But we're going to take care of the insurance companies and the municipalities. And a lot of business owners own real estate, whether it's the office that they have or whether it's their portfolio of real estate. And when that stops cash flowing and then an H Vac pulls out or a roof gets damaged or destroys the house on the way out. They're out every dollar that they've made for an entire year on that. The second is, let's say in 2022 you made a million bucks. 2023, you got to pay taxes on that million bucks. Taxes are paid in the rear in 2023, in April, May, June, July. Whenever it is you decide to pay taxes as a business owner, depending on when you extend it, you're having a year that is 20, 30, 40% less as good of cash flow as it was in 2022. Now every dollar they saved has gone out the window in 2023 and you can't take the loss in 2023 till this year and this we're trailing from better years and business going down and getting taxed in arrears. Man, I'm already out of money and now they're taxing me from a year ago when I thought things were going to continue to be good. So maybe bought more inventory, got a bigger warehouse, maybe went and hired more people. Now I'm not making as much money and I still owe those taxes and I got to let these people go in order to do that. I hear these stories all day, every day. It's a combination of things. Our cost of goods are up. Diesel is traditionally less expensive than gas. But a few years ago they started making us put, put death fuel on top of diesel. And now diesel is more expensive than gas. And I'm watching great companies and trucking companies go out of business left and right because they've got to charge a higher price in order to pay for the expensive diesel. And you're burning 3, 4 gallons to the mile because you've got a big ass load in the trailer that you're traveling with. You can't take a loss on that. You've got to make some money. So you either lower your margin or you go out of business and watch a lot of that happen too. So this is the lie, this is statistics we see from the government. The cost of goods may only be up 4 or 5%, but the lack of drilling new wells. We haven't drilled a new well in America since 2017. We haven't opened a new refinery in forever. And everything's operating at max capacity. Diesel is super expensive, which means the transportation of goods to get to the store, to get to our doorstep is through the roof. And so now we're having to pay more for that. Even if you're making more money right now, you're actually making less money because everything else that you have to deal with is more expensive. For a family of six in my house, health insurance, and we're all health. None of us have anything wrong with this. Three grand a month, that's $36,000 a year. If I wasn't a good entrepreneur, I didn't have to go take a job where they pay for my health insurance, which cost the company $36,000 a year. I make $100,000. I'm really only making $64,000 to live on. Just after health insurance. That's not mortgage, that's not gas, that's not food, that's not any of that shit.
- [12:22]
A
That was just a masterclass. What is happening in that's impacting business? The impact of interest rates being high is having a huge impact. Things that aren't even related to real estate, the cash that it's keeping out of the everyday market because those rates aren't so high, because people aren't doing what you're saying, flipping houses, doing things. When you stall real estate in this country, you have stalled the entire economy. There's not as much free cash flow and just business transactions happening.
- [12:52]
B
47% of real estate agents have not pulled a hold in the last 12 months. The median home sales per real estate agent in the country right now is two in 12 months, it was three just a couple of years. That's been cut by a third. Traditionally hard money rates 8, 9%. Now they're 12 to 15. The SBA was 6 to 7%. Right now the SBA is at 12 to 16%. You can't go acquire businesses. You can't acquire houses and profit from them even if you buy a primary resident. My home, I paid a million bucks for it years ago. It's worth $2 million right now. Prices have gone up in my area. If I were to sell that out and keep a million DOL. First of all, I'm going to be taxed on 300,000 of that because it's only a $700,000 non capital gain primary resident. So I'm gonna be taxed on 300 grand of that. Then if I go buy another house that only cost me a million dollars, maybe I move further out of the city. So I'm paying more for gas, transportation, things of that nature. And that house at a million dollars costs more than my house right now with the low interest rate. I have a ranch house that I've bought for $440,000. The mortgage is more money per month on that than it is for the million dollar house that I bought six years ago and refinanced 2.875%. I'm paying a thousand dollars less a month for a two million dollar house that I've owned for six years. Then a $400,000 home that I Just.
- [14:14]
A
A year ago a guy like Ryan busted his ass running businesses, creating jobs, doing these things, investments. But these are the impacts for him. Imagine what the impacts. Talk about cost of goods. Like everyday people, they're paying $7 for a loaf of bread and all this. But that's back to the fuel, the cost of getting it there.
- [14:30]
B
You make year which historically is excellent money. But you got three kids, you're paying $2,200 a month or 30 grand a year for health insurance. You're paying 35%, 38% in taxes. So you're really living on about 35 to $40,000 a year after just taxes and health insurance on a W2 job with a couple of kids in $120,000 a year salary. It's crazy. And right now I'm somewhat of a Main street economist because I've been in the financial markets for time. The Fed cuts rates, they're chasing problems and unemployment is at an all time high right now. You're not going to get that from a government statistic, but it is what it is. Inflation is actually going down a little bit. So the Fed cut rates because of unemployment. Companies can go out, borrow cheaper money to grant and hire more people. But anytime the Fed has cut the rate, there is always in the next three to 12 months, a 20 to 55% decline in the value of the stock market market overall. We haven't seen the market crash yet. And the ramifications of what are to come from that because of this rate cut. Because they don't just cut the rate because they're like, we want to be nice to people and give them more money. That's not how it works.
- [15:44]
A
The whole point in that is, yeah, we want the rates to come down, but they didn't need to get that high to begin with because these policies created. They're both the cause of the disease and the prescription. It's dangerous.
- [15:56]
B
How can I be a problem solver if I don't go create a bunch of problems? That's what these politicians do. They go create a bunch of problems and then promise us that they'll solve them. Or you did this. The solution was not to raise rates six consecutive times in a row. 3% interest rate is ridiculously low. That was great. But anybody with a half a brain knows the sweet spot in America for mortgage interest rates is five and a half percent. That's enough to keep people buying. It's not too expensive. That's the sweet spot. They should have raised from three to five and a half and just stay there. That they went to seven and a half.
- [16:29]
A
Yeah. And they flatlined everything else. And you don't feel it immediately. That's why we're starting to feel it now.
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Everybody tells you it's okay to be fat and you're beautiful and all this stuff when you're clearly not. Those people are lying to you and Doing wrong versus the person that calls you fat and hurts your feelings and tells you to get in the gym and start eating correctly and holds you accountable. Now, you're more likely to hate person that calls you fat and tells you to get in the gym and eat right. But that person actually cares more about you, you person, than the people who care about your feelings and how you perceive them as nice people. The truth hurts. But God designed the truth to hurt us because we're only motivated by two things, pain and pleasure. And the truth hurts to motivate you because of pain, to go do what you need to do. And we just hide. As citizens, as humans, we're hiding from the truth and we're trying to get pleasure out of everything. But pain is a bigger motivator than pleasure.
- [17:23]
A
It's a cycle of comfort. Because the person that doesn't tell you the truth isn't not telling you the truth to make you feel good. It's so they feel good because they don't have to see you respond negatively and be hurt. They want to be liked, too. Everybody wants comfort. Everybody wants to be liked. But it takes real strength, real courage and real belief to tell you the truth. Because then that's what's truly good for the other person and not good for them. Where can everybody keep up with you?
- [17:49]
B
Instagram at Hardcore Closer. Facebook. Ryan Stuman. Both of those have blue checks. They're verified accounts. I'll never get you up for crypto or sliding your DMs from a backup page. If you enjoyed the show, if you got something out of what I said, just slide my dm. Say hello, say you enjoyed the show. Let me know. It's me really managing that, not a team. So I'll talk to you on there.
- [18:08]
A
I love it. He's real and he's right, you know, to find us. Ryanisright.com we'll have links to all Ryan Stuman stuff. Hardcore Closer. Go follow him and you can find us over on YouTube. Watch this full episode. We're blowing up over there. We're taking over. We're taking the BS out of business. We'll see you next time on right about now.
- [18:25]
C
This has been Right about Now with Ryan Alford, a Radcast Network production. Visit Ryan is write.com for full audio and video versions of the show or to inquire about sponsorship opportunities. Thanks for listening.